Flat-rate plans may leave carriers gasping for bandwidth

A report points out the implications of unlimited calling plans: when they're …

The proliferation of unlimited cell phone plans, be they voice, SMS, or data, will result in much greater demands on the infrastructure of the cellular phone companies, according to a new report by market research firm ABI Research. That might not sound like rocket science to you or me, but it's something that the industry is going to have to take seriously, as it means beefing up their backhaul capacity in order to keep up with demand.

Cellular providers are working hard to retain their customers as the market reaches the point of ubiquity. The advent of (relatively) hassle-free number portability, and network exclusives such as the iPhone has meant that operators have to come up with convincing reasons for their customers to stay put, and opening up the bandwidth taps is a pretty good one. AT&T, Verizon, and Sprint now all offer unlimited calling plans for $99 per month, and Sprint goes the extra mile by including data services in that price.

"Flat rate plans will test the limits of 3G networks, raising new challenges for operators," according to ABI analyst Nadine Manjaro. "Operators need to pay close attention to the capacity limitations of their 3G networks and the true cost of 'all-you-can-eat' data plans."

ABI Research identifies video as the greatest bandwidth hog. That's from customers downloading things from sites like YouTube, as opposed to making video calls, that should have the network engineers most worried, and they point to difficulties that Korean telecoms are encountering as evidence.

Anecdotally, since that is the singular of data, I'm personally a massive fan of being able to use the data capabilities of cell phones. Whether it be Google Maps triangulating my position from cells, e-mailing pictures from my phone direct to Flickr, or using the phone as a Bluetooth modem, not having to worry about how many megabytes I'm using means I can use it a lot more without worrying about a massive bill at the end of the month.

When everyone at the mall is using their phones to check the latest YouTube rickroll, will we have to wait extra long for the first dulcet tones of "Never Gonna Give You Up" to emerge from our handsets? That seems to be the implication from ABI Research's report. Removing cost barriers to usage generally has the effect of increasing usage, and wireless carriers need to make sure their networks are up to the task of handling the extra traffic.